End of the China bull?

[Uncle Festivus]

Looks like the jig is up for dodgy Chinese data? The last few data prints just stretched the credibility of official data to the point where even the Chinese had to go back and re-do the sums, and surprise, exports came in vastly lower. And todays prints we get more of the same trend with exports down 3.1%, and crude oil imports down 1.4% in the first half - China is contracting. Probably worth another 200pts up for the Dow no less

And a small matter of the interbank rate and liquidity crunch still unfolding......

Now if only the US could do a mea culpa too.......with housing and employment.

 

[Trembling Hand]

Well they are not mucking around here,

From the official data dudes,

Export conditions look grim for the 3rd quarter

!

 

[Aussiejeff]

Well they are not mucking around here,

From the official data dudes,



!

Wonder how this 1st tranche of enforced elimination of industry over-production by Chines authorities will affect us economically? Seems the cut backs cover just about every "resources boom" industry the Oz gummint hangs its hat on?

With the time for implementation of 1st phase being rather urgent (coincidentally end of Sep 2013...better hurry up Kevvie baby!), by Xmas 2013 OzEcon production figures might start looking a tad bleak?? :1zhelp:

Might be better tactic for Team KRudd to ensure an Abbott victory so the Libs wear the blame for a diving economy?

 

[drsmith]

A wild ride in China today.

4% up, then 4% down on the SSE Composite Index to end not far from where it started.

 

[havaiana]

A wild ride in China today.

4% up, then 4% down on the SSE Composite Index to end not far from where it started.

Move up was confirmed as a fat finger, seems it was an arb bot gone wild

If you google "Everbright Securities fat finger" or something along those lines you will find the full details

Edit: last article I was reading about said rumour was that they were not going to roll back the trades either, so it seems that everbright are not looking so bright at the moment. Pity they weren't called evergreen, would be one-liners galore

 

[notting]

It will be hard to point the finger at foreign companies for this particular corruption -

Chinese lies may add $1 trillion to Chinese economy:

http://www.cnbc.com/id/100967912

"If inflation data is not accurate, or is willfully fraudulent, as appears to be the case, it will impact many other areas of economic and financial data leading to large disparities over time," said Balding. "It is disturbing that a statistical body would so obviously manipulate and produce blatantly fraudulent data."

"The claim that the housing component of CPI grew by less than 10 percent between 2000 and 2011 is nothing less than comical," Professor Balding wrote.

 

[notting]

A wild ride in China today.

4% up, then 4% down on the SSE Composite Index to end not far from where it started.

I liked this rumour the most:

Chinese government was trying to boost the index to stop traders from shorting the market.

In other words -

"Short us and we will flush you out any time we feel like it. Understand?" (We will also make it look like a trading error so as not to be seen breaking any local or international laws. We have the power - China Everbright Securities!")

As the house starts to fall down, it will be interesting times indeed.

 

[havaiana]

I liked this rumour the most:

In other words -

"Short us and we will flush you out any time we feel like it. Understand?" (We will also make it look like a trading error so as not to be seen breaking any local or international laws. We have the power - China Everbright Securities!")

As the house starts to fall down, it will be interesting times indeed.

Rumour doesn't make sense imo, the Everbright incident is more likely to make traders go short. Especially when you consider they didn't let them break the trades

 

[skyQuake]

Rumour doesn't make sense imo, the Everbright incident is more likely to make traders go short. Especially when you consider they didn't let them break the trades

Agree, they're partially hedged with a few thousand short index contracts.

 

[MARKETWINNER]

There appears to be emerging signs that China has not de-coupled from the rest of the worlds problems. Internal rampant inflation and pressure on food supplies from a cold snap may temper the rate of growth, with local implications/ramifications for Australia?

Food commodities the next/current global bull market perhaps?

A serious threat to Chinese food supplies with recent severe cold & snow storms.China's products to be less competitive?



And the share market fails the re-test?

The main concern that I have on China is credit market and property prices in China. Their over investment in gold also may create crisis in the future.

No country will have growth straight up. Similarly we may see slow growth in China time to time in the coming decades. Therefore we may see volatility for some commodities in some period. On the other hand some commodities including emerging commodities will have demand in China in good times and bad times. For example they will need more and more food and other proteins in good times and bad times in the coming decades. They will have less arable land in the future. Climate change may affect food production in China and Africa in the future.

At this moment actually China is doing well when compare with other emerging countries. Their currency is stable and they don’t have currency or gold crisis now.

In any situations there may be opportunities in some sectors. Those who focus on long term fundamentals will be clear winners in the coming decade.

My ideas are not a recommendation to either buy or sell any security, commodity or currency. Please do your own research prior to making any investment decisions.

 

[notting]

Hmmm.
inflation of 2.3%? Whilst GDP growth is better than expected at 7.3. with an export surplus? Oh and oil was up about 15 to 20% over the same period.
Yeah right.
That makes sense in an economy that's inflation is highly geared to the price of oil.
What is wrong with our journalists?
No wonder all the papers are going broke. They just swallow and report what ever they are told.

 

[MARKETWINNER]

If China introduces two child policies we will see more demand for some products.

Both China and India will eat more meat, grain,will drink more milk, coffee, coco and tea in the coming decade. Other highly populated countries such as Bangladesh, Pakistan and Indonesia too will create demand for meat especially for poultry products.

Countries such as South America, North America, New Zealand, and Netherlands will have great opportunity to export meat products to Asia in the coming decade. Some Asian countries also will have opportunity to export food within their Asia region

My ideas are not a recommendation to either buy or sell any security or currency. Please do your own research prior to making any investment decisions

 

[notting]

If China introduces two child policies we will see more demand for some products.

Yes a demand for a place where you can live(breath) is high on the shopping list.

http://www.cnbc.com/id/101225781

Run for your lives!!!utthedoor:

 

[notting]

Goldman actually making sense ~

Goldman noted that China, for example, has five main problems: "severely imbalanced growth, a weakening demographic profile, financial repression that has distorted allocation of capital, growing pollution that has endangered the health of its population, and an antiquated household registration system known as 'hukou' that has hampered access to education and social services."

 

[notting]

Significant.

http://finance.fortune.cnn.com/2014/01/03/rupert-murdoch-china/

It was obvious his wife was a wh@re spy.
Murdoch was a little Communist choir boy singing the praises of China's economic rise limiting the truth about these inhumane monsters in the Western press, to the detriment of all.
Now that Murdoch is out, the reporting on the reality of China, which has actually improved lately, should continue to be more reflective of the real situation.
The world will be a far better place for it.

There will be ruptions in markets as it unravels.

 

[Desrancompressor]

Interesting, thanks for that. It appears the Chinese authorities are even more behind the curve than I thought. I wonder how "innovative" they will be?

First have then to innovative. It's the routine

 

[MARKETWINNER]

My main concern in China is higher property prices. Just like other countries they also could have some bad period. Still investment opportunities could be there. Last couple of years we heard so many negative comments on UK and Japan. Still these markets gave some of the best returns to intelligent investors. I am slightly bullish on China and investors could have some moderate return from stocks in 2014. I am bullish on Chinese tea, poultry, meat, education, health sector and selected technology there.

Some of the options are:

Target the next most promising sectors in China
Avoid AUD, NZD and go long on USD
In good time and bad time people cannot postpone eating and drinking- Their consumer staples sector will outperform in good and bad times.

My ideas are not a recommendation to either buy or sell any security, commodity or currency. Please do your own research prior to making any investment decisions.

 

[notting]

My main concern in China is higher property prices.

There are a few other concerns (connect the dots)

'm thinking we need to call this industry what it really is: China's answer to Enron. The Houston-based Enron's real business wasn’t energy and commodities, but book-cooking. The same holds true for China's shadow-banking entities. They are the fuel Beijing uses "to restart the furnaces," without attracting the notice of Moody's, Standard & Poor's or the US Treasury Department.
China's financial system is the ultimate black box. You don't have to be a genius to conclude that when JPMorgan Chase estimates shadow banking to be 69 percent of China’s 2012 gross domestic product, it's a wildly conservative guess. I wouldn't quite add a zero, but if China fudges trade and other run-of-the-mill data, you can imagine the lengths to which it goes to hide the magnitude of its credit bubble.
"There are some eerie resemblances with the financial conditions that prevailed in the US in the years preceding the crash of 2008," Soros wrote. "But there is a significant difference. In the US, financial markets tend to dominate politics; in China, the state owns the banks and the bulk of the economy, and the Communist Party controls the state-owned enterprises." He added: "How and when this contradiction will be resolved will have profound consequences for China and the world."


Read more: http://www.smh.com.au/business/chin...ainst-china-20140110-30l8c.html#ixzz2py0sKuME

Target the next most promising sectors in China
Avoid AUD, NZD and go long on USD
In good time and bad time people cannot postpone eating and drinking- Their consumer staples sector will outperform in good and bad times.

The local food is becoming toxic from the pollution which is another little issue.

 

[skc]

This is something to keep a close watch imo.

Industrial & Commercial Bank of China Ltd. is rejecting calls to bail out a troubled 3 billion-yuan ($495 million) trust product, a bank official with knowledge of the matter said, stoking concern that the nation’s first default on such high-yield investments may be looming.

http://www.bloomberg.com/news/2014-...oubled-china-trust-product-official-says.html

Another link to the same story
http://www.forbes.com/sites/gordonchang/2014/01/19/mega-default-in-china-scheduled-for-january-31/

Chances are there will be a bail out of the investors in that particular product, as the risk / cost of a mass exit in other products would be much much worse. But if too many more of the blows up then it might be impossible to keep a lid on.

In Jun 2007, 2 of Bear Sterns subprime mortgage funds failed and that was essentially the first warning bells of the pending GFC. This may or may not be the same...

 

[Huskar]

This is something to keep a close watch imo.



http://www.bloomberg.com/news/2014-...oubled-china-trust-product-official-says.html

Another link to the same story
http://www.forbes.com/sites/gordonchang/2014/01/19/mega-default-in-china-scheduled-for-january-31/

Chances are there will be a bail out of the investors in that particular product, as the risk / cost of a mass exit in other products would be much much worse. But if too many more of the blows up then it might be impossible to keep a lid on.

In Jun 2007, 2 of Bear Sterns subprime mortgage funds failed and that was essentially the first warning bells of the pending GFC. This may or may not be the same...

Very interesting indeed thanks SKC